By Steve Hrop
While business integrity is a perennial issue, its prominence in the public consciousness waxes and wanes. The trigger for its re-emergence as a hot issue usually is a high profile incident involving a major corporation. Toyota and BP are recent examples. While these crisis-driven examples of lapses in business integrity are interesting, my objective in this blog is to highlight some of the factors that predispose leaders at all levels to cross the line in more everyday situations.
Business leaders who cross the line ethically fall into two categories: those who know they’re doing so (Bernie Madoff is the poster child for this type), and those who are unaware of having done anything wrong. The first type brings to mind a cartoon published in the Harvard Business Review a few years ago. Two guys are loading numerous documents into a paper shredder. One says to the other: “Someday we’ll look back on this and lie to a grand jury about it”.
Far more cases of unethical behavior fall into the second category. In an interview a few years ago, Lee Roy Beach, one of the world’s top decision researchers, spoke for all of us when he said:
“The ethical lapses I’ve lived to regret didn’t seem like lapses at the time. It was only afterwards that I realized how badly I behaved. I wasn’t knowingly unethical; I simply failed to recognize that the situation was ethically dangerous”.
The renowned author and executive coach Marshall Goldsmith made exactly the same point in a recent presentation I attended. A well-known metaphor that perfectly captures this tendency is “the boiled frog”. If you put a frog in a pot of boiling water, it quickly jumps out to safety. If you put a frog in a pot of room temperature water and gradually raise the temperature, the frog will remain in the pot until it’s boiled alive. In a similar way, executives take tiny steps toward unethical behavior until they cross the line without realizing it.
Examples of rationalizations by business leaders for unethical behavior are:
- The company policy is unreasonable
- We’ll wait until the lawyers tell us it’s wrong
- Nobody will be hurt by this action
- Our competitors are doing it too
- If we don’t do it, our competitors will
- We need to cut a few corners because of the tight deadline we’re facing
While all leaders are vulnerable to crossing the line unintentionally, I’ve identified a set of 15 personality factors that dramatically increase an executive’s predisposition to cross the line. These factors emerged from my executive coaching, leadership assessment and organizational research work over the past two decades. Here are seven:
- Unable to acknowledge and learn from mistakes (e.g., makes excuses, points the finger elsewhere, or becomes defensive)
- Has an excessive sense of urgency to get things done by “yesterday” that leads to cutting corners
- Seems to be angry about a lot of things (e.g., is often sarcastic, cynical, or derogatory)
- Does not seek or welcome feedback (“Here are five reasons why my 360 Feedback results are WRONG”)
- Lacks inquisitiveness and is low in “learning agility” (e.g., believes he/she “has nothing to learn”)
- Responds with pat “sound bite” answers to concerns or problems brought to his/her attention
- Has a rebellious us-versus-them mentality (e.g., tells his/her team: “Here’s another silly policy from the idiots at corporate headquarters”)
When an executive exhibits several of these factors (e.g., five or more), that’s a clear red flag. At PRADCO, our in-depth approach to leadership assessment enables us to assess these tendencies and work with leaders to become more self-aware of potential ethical landmines as they carry out their daily responsibilities. Readers interested in the full list of 15 factors can contact me at: shrop@pradco.com.
